Haro v. Sebelius

The secondary payer provision of the Medicare statutory scheme, demanding up front reimbursement for Medicare payments and requires attorneys to withhold settlement payments until the provision is satisfied by the beneficiary, is reasonable as it is interpreted by the Secretary of Health and Human Services.

Patricia Haro is the representative of a class of beneficiaries who were charged for up front reimbursements under the secondary payer provision of the Medicare statutory scheme, by the Secretary of Health and Human Services (Secretary). The class all received compensatory damages from their tortfeasors after Medicare had paid for the beneficiaries’ medical care. All of the beneficiaries received a letter demanding a payment within 60 days, before their unresolved waiver of reimbursement appeals were completed by the Secretary. The class claims that the demand for up front reimbursements is a violation of their due process rights. John Balentine is an attorney representing a member of the class. Balentine claimed that the Secretary’s practice of demanding that attorneys withhold settlement payments until the secondary payer provision is satisfied is inconsistent with the Medicare scheme. The district court entered summary judgment for the beneficiaries enjoining the Secretary from requesting up front reimbursements. On appeal the Secretary argues that (1) the class did not have standing under Article III of Constitution; (2) the case is moot; and (3) the district court did not have subject matter jurisdiction. The Ninth Circuit found that there was standing, but the beneficiaries’ claims were not adequately stated to the agency at the administrative hearing and therefore the district court lacked subject matter jurisdiction. The panel addressed the merits of Balentine’s claim but determined that the Secretary’s interpretation was reasonable. VACATED, REVERSED, and REMANDED.